tv Capital News Today CSPAN September 17, 2009 11:00pm-2:00am EDT
conclude is a good purpose to be in business. -- that is what you will conclude it is a good purpose to be in business. this committee stands adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> up next, house republicans present their ideas for health care legislation. kathleen said sebelius talks about the white house's plan for medical malpractice reform. jim douglas discuss the role of state government in the health- care system. . .
>> in 1971, as a new york times reporter, he received the pentagon papers. he won the pulitzer prize for "a bright shining lie." he will discuss his latest this weekend. q&a is sending night on c-span. >> house republicans spoke with reporters on thursday about their ideas for health care legislation. we will hear from several
republicans, including fox -- including conference chairman mike pence. this is a half hour. this is a discussion that we will come. we hope to find areas of agreement with the president to enact positive health care reform. however, our whole effort has been hindered by the president's recurring inaccurate statement that republicans have no plans for health reform. his challenge to negotiate the other side [unintelligible] whether the president is being disingenuous or whether he is
misinformed, we do not know. but we have come here to say today that republicans have plans for health reform, that the status quo is not acceptable. we have plans to put patients and doctors in charge. we have plans that we believe the american people support and we want to work with the administration on reform. we have all heard the president on one-on-one occasion say that he 6 bipartisanship, that his doors open on republicans on this open issue. we can tell you that those pledges have rung hollow. we sought out the president. we have asked to work together and we have been denied at every opportunity. but we don't -- but we are not deterred. take, we are here to put forth a positive vision on health reform. no less than three dozen health bills have been reported -- have been introduced by a republicans this year.
here we think that patients should be in control of the system. -- we think that the patient should be in the control of the system. while the president says that it is is where the highway, we think there's a better way, the patients wait. we hope that the president will recognize that. i am glad to be joined by a number of colleagues who will talk about the specific pieces of legislation and and then we look toward to your questions at the end. i am pleased to introduce the chairman's of our republican congress. >> thank you, dr. price. thank you for calling this important gathering. you have before you today a good cross-section of the very best minds on health care reform in the congress of the united states. i am honored to stand with these colleagues. the american people want health care reform. it would lower the cost of health insurance at lower the
cost of health care in the long term. what is becoming increasingly clear is the american people do not want a government-run health insurance. it will cost millions of americans to lose the health insurance that they have, cost hundreds of billions of dollars in higher taxes, and lead to a government takeover of health care. the good news for the american people, as the republicans are demonstrating today, there are plenty of good alternatives to government-run insurance. for those who say that republicans have no ideas and new proposals, i respond simply by saying go to gop death of -- the two gop.gov. you can read the patient's choice act, the medical rights act, improving medical care for
all americans act, health care choices for seniors act, and tri-care continuity of coverage act. you can read the extraordinary work of the leaders in congress. the american people are rejecting the liberal, big government approach. they do not want an approach that puts government first. they want another approach that puts patients first. we encouraged this administration to join us in a fresh dialogue about other alternatives. >> thank you so much, mr. chairman. the gentleman from wisconsin has been working on this issue for literally years. i am pleased that he is here with us today. >> it was very clear at my 17
town hall meetings in august over the break. there are problems that need to be fixed. people want to see congress fix what is broken in health care without breaking what is working in health care. that is what we're trying to achieve here. what you see here are lots of different innovative ideas offered by republicans on how to fix what is broken in health care without breaking what is working in health care. we have shown, we have proved, we have demonstrated in this bill that you can have universal access to affordable health care coverage for a buddy in america, including people with pre- existing conditions, without having the government take the system over, without brand new tax increases and trillions of dollars in new spending. we already spend more than two and a half times per person on health care than any other country. we spend plenty of money in america on health care. let's spend that money more efficiently and more effectively and let's do it in a way where the patient is the
nucleus of the system, where the dark -- for the driving decision maker is the doctor, not a bureaucrat. we do not want a government bureaucrat making these decisions and we do not want an insurance bureaucrat making this work. we proposed a patient-centered system. i'm fortunate, what is being jammed through congress is a government-centric system. at the end of the day, it comes down to where does the power go? who gets the power? through all of these bills that we are proposing, we believe that the partial go to the -- we believe that the power should go to the patient. make providers, hospitals, doctors, insurance companies compete against each other for our business so that we, the patients, are the nucleus of the system. that is the alternative we are asking the president to
consider to his government- centered system, where the patient makes these decisions. the biggest fiscal crisis in america, the effect -- the fact that our debt is going so high, is because of health care spending. if we make the government the single or primary spender of health care, the only way to solve our fiscal crisis, the only way to solve our debt problems, it is to be the government to be in the position to ration care. that is not the road we want to go down in america. what we are proving with these bills is that it is unnecessary and it is avoidable. we want to put the patient back in the center. we want to work with the president to do this. unfortunately, our overtures, and our offerings of ideas and alternatives have been rejected time and again. that is why you have one party rule tried to jam through a bill that puts the government in charge of our health-care system. we think that is wrong and we
think there are better alternatives. thank you. >> the breadth of ideas across our conference is white. there's not a single individual on the republican side that thinks that the status quo is acceptable. the gentleman from illinois who is one of the members of the tuesday group has embraced, along with others, positive reforms that put patients in charge. >> i spent august in 40 illinois cities where this was the number one topic. when i got home from active duty in afghanistan, we began working on a reform package. we put together the medical right and reform act. it has three main pillars. first, the medical rights act that says congress shall make no law interfering with decisions that you make with your doctor. secondly, defensive medicine reform.
you can add to health-care reform in the congress without lawsuit reform. and fully electronic medical records owned by the patient. you can go between pendulous without repeating diagnostic procedures. the final pillar is insurance reform. americans should have the right to buy from any state in the union. congress should give the same tax breaks to individuals that it gives to employers when they buy health insurance for themselves and their families. the smoking whole of health insurance in the united states in america is the state of new jersey. there's no lawsuit reform. $5,500 to ensure patients in that state. the best state in the union is calif., rocking rowling -- rock and roll in lawsuit reform, and they have cut their costs to half of new jersey's level.
now i would like to introduce the leader on insurance reform from arizona. >> you may feel old. trust me. you do not look old. i just want to start by pointing out [unintelligible] the president said, and i am glad he said, he said, point blank, if you come to me with a serious set of proposals, i will be there to listen that is a great offer. unfortunate, it has not been true until this point in time. i think every 10 more health care reform proposals than any member in congress. i began writing a patient's bill of rights back then. i wrote some that are which [unintelligible] i have written a bill which
addresses the number-one concern that the white house is using right now to sell its proposal. the proof that we need health care reform is that, in many states, as much as 75% of the people in that state to buy health insurance in the individual market only has five plants to choose from. he pointed out in his address that at least one state has 95% of the people that get their plans for only five countries -- by companies. welcome to the discussion, mr. president. i offered a bill three years ago to address this issue. it is a bill called the improving health care for all americans act. it would allow you to buy health care, a health-care plan offered in one state that was then brought to an offered for sale in all 49 other states.
that bill came out of new jersey. it came out of the fact that, people in new jersey had learned that the cost of health care in new jersey was five times as high as the cost of health care plan in neighboring pennsylvania. you know what? they discover they're going to the same doctors in the same hospital and paying five times as much. people were shopping with their feet. there recently committing health insurance fraud. there would go to their brother- in-law or cousin who lives across the line in pennsylvania and discover that their policy in pennsylvania, for the same family of four people, was one- fifth of expensive -- one-fifth of expensive. because i go to the same hospitals and the same doctors, let me apply from your address and get the same coverage and the same doctors and the same hospital and pay one-fifth as much. mr. president, the idea of increasing competition for the insurance policy is out there.
it has been out there for at least three years in the bill i wrote. unfortunately, i was not invited to the white house to discuss that. neither was anyone else invited to discuss that issue. the ranking member on health care was not indicted for the drafting of the bill on the house side. so i have an interstate commerce bill that would bring down the cost of health care in the individual market. i also have a bill called the improving health care for all americans act. it has different ideas. it has ideas that i would argue course -- are a serious set of proposals. but the president has not been interested in those ideas so far. us talk about where there is agreement and what we could be doing. every single republican bill appeaup here addresses to of the
critical issues. we'll address pre-existing conditions. none of us allege that they should be able to continue to deny people care. all this proposed to solve that problem every republican's proposal embraces universal coverage, covering every american. where there is disagreement, the president said that the answer to controlling costs is to get the government vastly more involved. we do not agree with that. we believe that getting -- we believe getting people involved, like everywhere else in our economy, will solve the problem. you put patients first annual drug costs down and quality up. we have different avenues for doing that. i believe that if you have an employer provided time, and you like it, you should be able to
keep it. but you should also have the option of not taking it and buying your own plan. but the other side will not discuss those options. it is time for us to have a positive bipartisan discussion. my bill is that exactly how we can bring down the cost of health care in america by letting people get more involved. it is interesting. my colleagues on the other side of the aisle says that this is critical. but if somebody else is paying the tab for your health care, europe are not motivated to -- you are not motivated to dissipate in rural -- to participate in your own wellness. if the press tells them that there are no republican alternatives and the president leaves is ready -- and the beer present only uses -- and the president only uses rhetoric [unintelligible]
>> vd gentlemen from pennsylvania is a leader in our conference. -- >> the gentleman from pennsylvania is a leader in our conference. >> i will hold the bill up and said, you know, for 1017 patientpages, i defy anyone to e article about liability reform. that is an essential component of overhauling the american health-care system. but the bill we have been dealing with is silent. i've been working on a proposal. we have legislation that will address this serious issue. we compare favorably to new jersey. at that time, we did not compare very well on medical liability
issues. in my state family have hospitals that refused to stop delivering the believebabies. we have been a crisis stage for very long time. we have medical schools but only deliver babies not just for the purpose of teaching residents, that is it. it is a very real issue. we propose that we will deal issues like joint and several liability. we will stop the deep pocket theory of this madness. we also get into this issue of structuring payments differently. emergency room protections, we want to make sure that those physicians who are providing care during the most difficult times are protected. they are providing a cuddly mandated service. they should be treated as federal employees. we will not make them federal
employees, but they should be treated as federal employees. we're concerned about cost, to be sure. people need access. if women can deliver their babies were people cannot get service in a trauma center when they need it, we have failed the american people. that is what we are about. that is what our proposal is about. that is what we're doing. those are positive changes that the american people support. that is what i have to say. >> thank you very much. that is great said way to what i wanted to discuss in regard to medical liability. first of all, let me just say that it is a pleasure to join with my republican colleagues. the republican party of nknow. you heard in the german talk
about five bills are six different bills -- you heard the chairman talk about the five or six different bills here. there'll also lists 35 other bills out there. -- there are also at least 35 other bills out there. i heard him speak to the american medical association in june about the need for medical liability reform. he said it once again last week in the joint session of congress when he was speaking to the nation about the need for medical liability reform. ladies and jumped -- les and gentlemen, when you talk about a silver bullet and health care reform, the rand corporation estimates that medical liability reform could save as much as $120 billion a year.
i have a specific bill, 1086, the health act of 2009, which addresses a lot of the things that my good friend from pennsylvania just talked about in regard to medical liability reform. the most important is a cap on non-economic pain and suffering awards which was modeled after the bill passed in california back in the late 1970's. it works. it brings down the cost of liability premiums so that, unlike today, you do not have one in seven ob/gyn's quitting their practice. you do not have 40% of the counties in the united states without an ob/gyn position. this savings will allow us to leave that $500 billion in the medicare system that we are about to take away from medicare advantage and hospice.
it does not require us to raise taxes by $800 billion a year as [unintelligible] the republican party has lots of ideas. we look for to sharing those with the president. we need to do this on a bipartisan basis. maybe there are some components of my bill that will have to change. i am willing to do that. but at least give us the opportunity to talk about it. we need health care reform. we all agree with that. we need health insurance reform we need to bend the cost curve in the right direction and to bring health insurance to more people and make it more affordable. we can do that. but we do not have to throw the baby up with the bathwater. >> thank you. because of our early votes today, we were a little bit -- we had some folks had to the
airport. there were a number of other folks that wanted to be with us today. if you think about the principles of the american people as they relate to health care, whether it is accessibility or affordability or quality or responsiveness of the system or innovation in the system or choices that patients ought to have, any of those principles, and none of them are improved by the intervention of the federal government. what you hear is a breath of ideas, a positive group of solutions that we put on the table. we can say to the present, we have other ideas that would add this -- would assist in making sure that patients and doctors can make those medical decisions. we solve the liability issues. we do so in a way that respects the system that the american people have come to love and appreciate and a desire. we look forward to meeting with you, mr. president. we are at your beck and call. all you have to do is give us a call and we look forward to discussing this issue and others
with you as we move forward with that, we're happy to take some questions. >> [unintelligible] >> each of the price tags on these bills there is a little bit. the one that has over 40 co- sponsors from the republican committee is th.r. 4400. it makes it so that patients and families and their physicians are making medical decisions. it solves the liability challenges and it doesn't without raising taxes by one penny. through savings in the system and and the liability system and making sure that the decisions are made by specialty societies and not by bureaucrats and by making health reform a priority in this nation by gaining savings elsewhere. you don't have to tax the american people. and you do not have to slash
medicare by $500 billion in order to pay for it. >> [unintelligible] >> we provide for 1% decrease in non-defense discretionary spending over 10 years. >> [unintelligible] >> there is some estimates that the practice costs about $200 billion to $300 billion per year. >> [unintelligible] >> our plan, the 3400, is paid for and it runs about $600 billion, somewhere in that range in terms of the cost of the plan itself. it is deficit-neutral and does not increase taxes. >> in the minority, where not have beehaving our scores given.
we know how to write these bills and we know how to do our own scoring. we are confident that we have written are built in a way that is deficit-neutral. but we are in the back of the line when it comes to getting scores. >> [unintelligible] >> i feel like democrats are probably willing to give you something. you might feel like you guys are not interested in their major proposals. [unintelligible]
democrats feel that you might not want to come forward with that. >> the notion that we would concede on anything that leads to the government takeover of health care, which are a number of items, is not acceptable to us. it is not just the government option. if the government is defining what every insurance policy in this nation has to be, that is the fact of government takeover of health care. if the government is defining what kind of care is allowed by rationing and buy it algorithm medicine, that is the government takeover of medicine. a kind of things that we do agree upon, health information technology, electronic medical records, incentivizing those things, wellness and prevention programs, incentivizing those programs, certainly. there's a lot of room for agreement. but they are -- but if they're unwilling to come off of their desire to put the government
before patients and doctors, then, yes, we are not interested in conceding that. >> [unintelligible] c-span.or>> there are really thg issues. pre-existing conditions and cost control. on two of the three, of the three biggest issues, universal coverage and pre-existing conditions, republican s are saying that we are ready to go. we're ready to embrace pre- existing conditions. no american with a pre-existing condition or a chronic illness will go bankrupt. on universal coverage, three years ago, he would have said no republican would support universal coverage. i think every single one of them has universal coverage.
onto the three biggest issues, we are already there. -- on two of the three biggest issues, we are already there. those are huge concessions. the notion that we now have to give more to get more reform, i don't think so. >> [unintelligible] >> we do not believe that any american ought to lose their insurance if they change their job or they lose their job. we believe that it is important to provide a system where employees or patients can choose the care for themselves and not the government. that we make it for patients to own and choose their own
insurance policies. you get the purchasing power of millions if you're left out there in the individual market. for each and every challenge, where there is a positive patient deaths centered solution that we have put in each of our bills. cracks in my bill, it recognizes the fact that 60% of all americans get insurance from their employer. but their employer picks the plan. if they leave the employer, they have lost their coverage. my sister, a breast cancer survivor, worked for a school district. if she had left and went to another group plan, she may have been able to get coverage. if she had left and went to a consulting firm and had to buy her own coverage, she would have been left out. my bill says that, number one, if you have health care and you like it, you keep your care and you keep the tax exclusions. if you do not like your
employer-provided care, you can go out and buy your policy either in the individual market or in an enhanced group market. people have choices in a group market. but you'll let policy. -- but you on that policy. and it is portable. i think that is the ultimate in portability. >> one thing that is so a important about they said about patient-ownership, the situation with a young person and many of the uninsured are young people -- they are 20- something, straight out of college or straight out of high school, their first job, and they have a lot of expenses and cannot afford health insurance. that is probably the top a
policy that i would recommend to a lot of these folks. but if there with the company and they do have health insurance. they're paying $600, the over 15 years and they have very few claims, obviously, the insurance company is making a profit off of them. if they get sick and then they lose their job, there ought to be some guarantee on the part of the insurance company because of that credible coverage to give them the same rates. that would be possible if they own that policy. this is one area in insurance reform that we clearly could save a lot of money for the public. >> we're going to close it at that. i encourage you to go to gop.gov. thank you much.
we have gotten a very polite thank-you for a request for every meeting. thank you very much. >> kathleen sebelius was at the white house briefing on thursday to talk about the administration's plan to change medical malpractice laws. this is 25 minutes. >> we are doing this a little early today. you can all watch the president's events or trouble as you may be needed to do. before we take our regularly scheduled questions, we will hear from secretary sebelius who
will talk to you about some demonstration projects and grants and a program that the president, as you know, during the recent joint session of congress, asked her to look into regarding medical malpractice. i will turn it over to the secretary. >> thank you. good morning. on tuesday of this week, we received the latest evidence that the health-care system is simply unsustainable. the kaiser family foundation came out with a new study showing that, for families, health insurance premiums rose from under $6,000 to over $13,000 in the last 10 years a second report from the business roundtable focused on his company's that showed that they estimate companies will play over $20,000 in health-care costs for each employee in the next 10 years.
you heard from the president a week ago who outlined a plan to move in a new direction. that would provide security and stability to the americans have health care coverage and affordable coverage to those who don't and raise equality for all americans. but as part of the new direction, he directed me, as secretary of health and human services, to move forward on medical liability demonstration projects. that put patient safety first and lets doctors focus on practicing medicine. this is an area where we know we can do better. as many as 90,000 americans die every year from medical errors. although malpractice premiums themselves count from a small percentage of total medical costs, many doctors report that
they practice for costly defensive measures because they are fearful of lawsuits. reflecting these concerns, the presidential memo that i'd received today directs my department to make $25 million in grants available to save localities and health systems to try out new patients safety and medical liability models. grants will be available for the development, implementation, and evaluation of models that do four things, but patient safety first and were to reduce preventable injuries, foster better communication between doctors and their patients, and ensure the patients are compensated in a fair and timely manner for medical injuries while reducing the incidence of frivolous lawsuits, and lower premiums. those goals are consistent with the principles identified via
the commission and the institute of medicine and the goals that were contained in the legislation that president obama, as a senator, introduced in 2005 with the then senator hillary clinton. we're moving toward on the produce immediately trad. within 30 days, we will post a funding option online. there will be 60 days to apply for two different kinds of grants. there will be a one-year planning grant. that will help localities have conceptualize new patient safety and medical liability models. demonstration grants for up to three years will be $3 million. that will help the implementation of projects that are ready to go. at the same time that the grant applications are being submitted, the agency for health
research and quality will be conducting a review of white is currently in place throughout the united states and what evidence there is that has been gathered about what works and what does not work. as required by law, every application will go through a rigorous review process at the committee, which includes bylaw a peer review by independent scientific experts. at the end of the process, we will announce the grant award early in 2010. so the demonstrations are about learning what works and what does not. grantees will be required to report back to us with the data on patient safety and medical liability costs. as i mentioned earlier, this is not a new area interest for the president. he said from the start of the reform process that he is open to any idea that will help improve health care quality and patient safety and bring down overall costs.
the demonstrations made possible by the grants will help us learn what changes are needed in our health care and playability systems to help accomplish our goals. we're looking forward to collecting the data, sharing it, and acting on his part of our ongoing effort to make sure that all americans have access to the best quality, most affordable health care possible. >> this is such a serious problem. this is what it says in the release. then why did the demonstration? >> i think the good news is that the president feels strongly enough about this that he wants us to move ahead right now he is not using this as a lever. he feels that we can move ahead. we have had this authority within the agency for health research and quality since 1999. nobody, not the primary miss station, not anybody that has ever directed this agency has moved ahead.
the president thinks we should do it right now. we will move ahead the way we are moving ahead on medical homes model, which is a great experiment taking place in various parts of the country. >> but the researchers already there. >> the research is not there. -- but the research is already there. >> the research is not their. >> -- the research is not there. >> how does somebody not interpret this as a huge interest groups for the democratic party? >> as you can recall from the president's campaign, i do not recall him as being the preferred candidate for trial lawyers. [unintelligible] i would check your figures on that.
the authority has existed since 1999. there are provisions in some of the house bill's that would codify some of the word that the president introduced in the senate -- some of the work that the president introduced in the senate. [unintelligible] it can get doctors practicing medicine. >> how soon do you anticipate things actually changing in the real world based on the grants, the work done, and the changes as actual doctors saidand
patients begin to act? >> we are looking at models already in place. the system that was contemplated in the medical bill is already in place, the university of michigan, the children's hospital, throughout kentucky, and they have demonstrated that they can reduce litigation costs, compensate patients in a much more timely fashion, improved communication. there are some models in place that we hope will we will take the -- we hope we will take a look at. different states have different bits and pieces of the puzzle. there is some voluntary mediation efforts. we think this is an opportunity to not only look at what has had a proven the effect in
lowering preventable errors, increasing patient safety, improving communication, and lowering costs. we're going to share that data. we're going to inform people around the country. there has been a lot of anecdotal babble for three decades. we think this is a great step forward. >> has hhs looked at these requirements? >> that is what we are going to do. that is the review that will be underway. it has never happened before. and there are two areas where states are medical systems can apply for grants. one is a planning bragrant that will be up to a year and what may working in that jurisdiction. the other is a demonstration project that could run for up to three years.
at the same time, the agency for health research and quality will be reviewing just exactly what is out there, scientifically, what has some evidence that it has had some impact on patient safety ensure that information as we go forward. >> $3 million is a pretty small amount. have you thought about how it would be expanded if the demonstration projects would prove evocationefficacious and? -- efficacious? >> the good news is that this can move forward within the next 60 days here in the grant applications can start coming in immediately. we have the framers up. this is a faster process -- we have the framework up. this is a faster process.
have we have not thought about how to expand. we're hoping that this becomes an opportunity for medical systems in itand some jurisdicts have moved ahead. others are strapped for cash and do not have the resources at this point. they do not have a lot of incentive. we hope this will jump-start it. we will take a look at if this is affected. if the evidence shows that it helps the patient safety and lowers costs and reduces for less lawsuits, i think there will be and not a tight -- there will be an appetite in congress and elsewhere to increase this. >> does this counteract -- >> i do not think this can iraq's anything. -- i don't think this counter acts anything.
it boohoos them to figure out [unintelligible] we know that close to 100,000 people die from preventable errors every year. patient safety is something that republicans and democrats take very seriously, certainly the president does. improving communications and compensating victims who are injured at a more timely and adequate fashion i think are all part of the goals that we will be looking at. >> you mentioned that, with legislation, everything will take a lot longer. some think administratively can be done much more quickly one area -- much more quickly. one area where they are trying to reach changes is medicaid.
if you expand medicaid, they feel they cannot afford to share the costs. they do oppose expanding it unless the federal government pays for that expansion. >> i certainly feel the pain of the states who are in really the worst fiscal crisis probably since the great depression. they're very sensitive to any unfunded mandates. governors have had their voices heard. the house had a significant cost-share for expanding medicaid, 90/10 sharing. the senate health committee does not have jurisdiction over medicaid. but when the finance committee came out their proposal yesterday, again, it is close to the 90/10 marks. but there are additional
medicaid savings, he needed additional funding for medicaid drug rebate and enhanced f-map share for currently states that have picked up the childless adults population that would be included. on balance, we have actually put out a state-by-state analysis. the majority of states would actually come out as beneficiaries from the proposal. i think congress has listened carefully to the states to say we are eager to work with you on health reform, but we cannot absorb a huge hit -- a huge share of new costs. >> [unintelligible] is malpractice the issue? >> i think patient safety is the primary issue to drive toward a system where we reduce -- the
best goal would be to eliminate preventable medical errors. lowering costs of malpractice and of defensive medicine is the goal. that causes billions of dollars of redundant tests or unnecessary procedures. getting to the point where, if an error occurs, there is just that rapid compensation and we move forward. i think there are multiple goals as outlined by the proposal, better communication, lowering medical errors, reducing lawsuits. >> will osha be involved in this? >> oso? not to my knowledge. they do not really have a role in the malpractice system right now. it is really a framework of state and federal laws. the certification of doctors
usually determines what the standard of practice is. it is not really an ocean situation. -- it is really not an oceaosha situation. >> [unintelligible] >> at this point, we are open to any planning grants or demonstrations of that meet those four requirements. i think the regulatory role is in the licensure anend. litigation than results in a complaint to the borrower has that oversight over licensure and can resolve them. whether that becomes part of the opportunity at the state or local level remains to be seen.
is legislation -- >> is legislation still part of the mix going for? i do see this move as something to take the pressure off? [unintelligible] [laughter] >> what is that about? >> margaret sneezed a few minutes ago, very correctly, in the sleeve. >> who has some purell? >> we will have elmo give a special briefing. we will have elmo over. he knows how to sneeze. [laughter] >> yes, sir.
>> back to the legislation, is this something that helps it or do just want to keep this issue out of the legislation? it has been seen to cause more problems over the legislative debate. >> i think there's no question that the issue of tort reform has been a very contentious issue at the state level before a couple of decades, at the federal level for at least that long i do not think this is an either/or. i think this is complementary to some of the proposals on the table. it certainly has been an interest of republicans and democrats to figure out the situation the authority has been within -- figure out the situation. the authority has been with the inequality and research. the legislative debate will continue whether or not there are various proposals and they
final legislation that comes to the president's desk, i cannot predict. but he takes this seriously enough that he directed me to do just that. he does not want to wait and see what may or may not happen. he co-authored a new england journal of medicine article in 2006. this is something that is not new to him. it is not new in the health-care debate. he believes in it seriously. he thinks we should go ahead and move with the authority that we have had in a decade. >> is it a dual-track process? >> as i say, i do not have a way of telling you exactly what components of this discussion will be in the final legislation. what is in the house versions right now are very complementary to some systems that are already in place and to what the
president proposed in 2005. i think there are lots accretive ideas. states are the laboratories of innovation. there are a lot of things going on at the state level, with an integrated health systems, within practices that i think have some real merit. what we need to do is apply some scientific rigor and see what really works. we know what the problems are, too many medical errors, high costs, particularly in specialty areas, liability insurance, off the lots of injured victims not being compensated at all. the challenges are there. i think this is the opportunity to get some creative thinking and bring people together to figure out what works. >> who is the real target? is it lawyers who are filing frivolous lawsuits or doctors were not practicing safe medicine? >> all of the above. i think both. >> can you put into perspective -- we keep hearing about
malpractice and the president who focuses on the rapidly increasing cost of the medical system. what percentage would you say the increasing price of premiums is do to malpractice? >> it is a number that you can get your hands on. about 1% of the overall cost of health care is attributable to a malpractice premiums. that is a number that really has not changed very much. what we do not know is how much defensive medicine could be eliminated with different kinds of systems. so doctors will tell you that they order additional tests, look over their shoulder constantly for different procedures, fearing lawsuits. how much of that is not called for, i have no way of
estimating we also have a fee- for-service system that is rewarded by contact and not quality. we have to many medical errors. to many people are injured or dying every year. we have a system that often has victims were not compensated at all or takes years to arrive at that. we have a situation where there are frivolous lawsuits being filed against practicing physicians and discouraging some specialists from practicing in certain areas. there are some challenges out there that we think and the president feels can be addressed by moving ahead. to have the agency within the department of health and human services charged with quality of medical care and research, moving ahead on this, i think that is inappropriate lensed to look at. some states moved ahead 20 years
ago. it has never really been examined or look at. that is part of what we are going to do. >> many doctors are saying that they may leave the medical practice. what is wrong with them? how can you keep them in practice? are you worried about it? >> i hear that also. the providers who are paying the highest rates are often in specialized areas, ob/gyn, neurosurgeons, areas where there are limited supply anyway and there are lots of folks who say, i am not good to do this anymore. because the practice is just too great. i think this is an effort to see if we can reduce costs. i think there are certainly some insurance challenges where liability is broken down into
very small category is. we talk about -- a very small categories. we talk about the pull of americans to buy health insurance. it should dip available also to medical providers. -- it should also be available to medical providers. i think there is an opportunity to look at a whole series of reforms and let the states and local health systems figure out what works and inform congress and the president about how we best to deal with the situation. >> thank you. >> coming up on c-span, of vermont governor and jim douglas discusses the role of state governments and the health-care system. health insurance executives testify at a capitol hill hearing. and house republicans present
their ideas for health care legislation. " >> tomorrow morning, there is a town hall meeting on health care with several members of congress. later, there will be remarks from its mcconnell and erick kanter. it is part of a fourth annual values voter summit hosted by the family research council. our live coverage begins at 10:00 a.m. eastern time here on c-span. .
>> this is about an hour. >> good afternoon, everyone. welcome to the national press club. i am a reporter for "usa today" and president of the national press club. we are the world's leading professional organization for journalists, and we are committed to a future of journalism by providing informative programming and journalism education and fostering a free press worldwide. for more information about the national press club, please visit our website. on behalf of the art 3500 members worldwide, i would like to welcome our speaker and our guests in the audience today. i would also like to welcome those of you are watching us on c-span. we are looking forward to
today's speech, and afterwards, i will ask as many questions from the audience as time permits. please hold your applause during the speech so that we have time for as many questions as possible. for our broadcast audience, i would like to explain that if you hear applause, it may be from the guests and members of the general public who attend are luncheons and not necessarily from the working press. i would like now to introduce our head table guests and asked them to stand briefly when their names are called. from my left, leeland schwartz, emily walker, sean bullard, a member of the national press club's board of governors, the director of the national governors' association center for best practices, and a guest of our speaker, and health report from reuters news, dr. craig jones, director of the
vermont blueprint for help, the speaker's committee vice chairman and independent journalist, matt, the speaker's committee member who organized today's lunch. the executive director of the national governors' association , a senior editor of "provider" magazine, congressional reporter, bloomberg news, and john mulligan, washington bureau chief for the providence journal. after servingers for nearly 40 years, beginning with his election to the vermont house of
representatives in 1972, our guest today has announced that he will not seek reelection in 2010. he currently serves as chair of the powerful and bipartisan national governors association. perhaps this is why he has been able to handle and lead to the radioactive health care debate without becoming a victim of political sniping. as governor, he focused his state on health care reform and reach across party lines to achieve consensus on his blueprint for help. building on the blueprint, he signed a comprehensive package of health reforms in 2006 designed to expand access to coverage, improve the quality and performance of the health- care system, and contain costs. as a result of his efforts, gov. douglas was honored in 2006 by aarp as one of 10 extraordinary people who have made the world a better place through their innovative thinking, passion, and perseverance.
vermont has been ranked the healthiest state by the united health foundation for the past two years while the uninsured population has shrunk from 9.8% in 2005 to a lower percentage. he has a critical role of states in national health care reform. he will talk to us about his yearlong initiative. prescription for health reform, affordable, accessible, accountable. it lets states contribute to the success of national health care reform and the importance of state efforts to help all citizens have access to more coordinated and efficient health care. please join me in welcoming to the national press club, gov. jim douglas. [applause]
>> thank you. thank you for those kind words in your introduction. it is nice to be here today. especially with some expatriate's from vermont in the audience. it is great to see them along with the team from the national governors' association. i do not get to our nation's capital to much. when you live in heaven, why would you want to come to washington? i am honored to come here today and talked a little bit about a timely topic. in response to some of the questions i got before coming in, we had a great maple crop. our summer tourists are up. next summer will be wonderful as the leaves begin to turn. we hope you all have a chance to come to the state.
i want to thank donna and matt for their invitation to be here. and this was scheduled some time ago. timing is everything. a little bit too much on my initiative. i would be remiss if i did not talk about what is going on on capitol hill in terms of health care reform. nobody in washington is talking about it. i thought i would offer a few perspectives from the standpoint of the governors. these are important issues for all of us. every governor wants to improve the quality of health care in our country. every governor was to reduce the cost of that care. it is particularly imperative because health care is such a huge portion of the national economy in terms of percentage of gross domestic product. increasingly, it is a large part of every state's operating
budget. medicaid is 22% of state budgets around the country. and places like vermont, it is an expanded program where it is greater. we expect it will be much higher over the decade. we have to take this seriously from an economic and fiscal standpoint as well as to improve the health outcomes of our great country. if health reform gets through congress, states will play a significant role in its implementation. some health programs are generally run by the state governments whether it is medicaid or some other program. it is obvious that states will play a key role in what capacity congress. it is critical from our standpoint that governors be given the time and flexibility to implement those reforms if we are going to be successful in carrying them out.
i will talk a little bit about several aspects of reform and how they affect the governors across the country. i think it is fair to say that although these are my own thoughts, i am reflecting on the preponderant of views of my counterparts on both sides of the political aisle. we appreciate the efforts that the congress is making. we recognize their progress. we want to make sure that federal policy makers are aware of the huge risks that the states are making. as i talk to people around the green mountain state and discussed the issue with my colleagues, there is a consensus that we have to do something. keeping the american people healthy is not a republican or democratic objective. there is a conference that they are sponsoring across town on the early education of young people. one focus of that is ensuring that kids are healthy when they are in their youngest years and
come to school ready to learn. their educational outcomes will be more successful as time goes on. at the other end of the chronological spectrum, vermont is the second coldest day in the nation in terms of age. as we get older, we have to -- oldest state in the nation in terms of age. we have common interests across the political spectrum. we have to make sure that congress is it right. i mentioned the economy. over the past year, the state has been faced with some real economic stress. even before the current recession, i talked about the affordability agenda. one key element of that agenda is the cost of health care. it is squeezing the budgets of families, small businesses, and governments as well.
and she noted a few minutes ago, i work with republicans and democrats in our legislature to pass comprehensive health reforms and really make a difference for people in our state. the successes that we realized in vermont have not come easily. they required more compromise, and willingness to address the tough issues are around health care. i think they can be a model for reform across the country. as we come out of this global recession, the longest and deepest since the great depression, we need to make sure that we are ready to grow as a nation in terms of economic health and the health and well- being of the people who live here. we are going to have to find some common ground. i have decided to make health care reform the focus of my yearlong initiatives as chairman of the national governors' association. after 6.5 years of working, i welcome the current discussion
in washington. in order for the state reforms to be successful, the state government should be a full partner. reforming one sixth of our national economy is no small task. it is a tough job for the congress. i certainly respect that. whenever they're talking about health care, and they are not discussing a single system, but a complex web of political, economic, and social issues that have a profound impact on the american people. it is understandable that americans have the right to worry about how they will affect the quality and affordability of the care that they receive. they have the right to worry about the inaction of how a quantity, not quality driven system will help. and there is nothing wrong with the lively and spirited debate on an issue like this one. citizens of march have an obligation to speak openly and
honestly about the costs and consequences of all of the reform proposals being advanced. the debate seems to have a way of veering off track, away from our common goals. my greatest concern about the current political discussion in washington is that it is to focus on the wrong end of the health-care debate, mainly the payment structure we have in place now. with so much time and energy focus on where the money comes from, no matter who pays, health care costs are on track to bankrupt our families if we do not act boldly in order to reform our system. the nation spends almost $7,500 per person for health services every year. that is more than double the national average for the other industrialized countries are brown world. the outcomes for america are no better. it promotes duplication and
waste. it too often does not encourage disease prevention, instead opting for expensive care after people are already sick. rather than oversimplifying the debate about how we pay, we need to put our heads together and talk about how we make health care more affordable and accountable across america. states like vermont that have demonstrated how innovative reforms can increase access to care can be a guiding light for the nation as we continue this debate in our capital. if there is one thing that i have learned about reform, it is that coverage is not enough coverage without significant improvements will eventually cause further strain on an unsustainable system. true reform needs to have cost drivers. we need to have changes in how we deliver care, how we realize
health and wellness to realize the population. these are things that will truly reform health care and contain spending that is out of control. we have to drive value in the system. it will take a lot of effort. in vermont we have displayed a reputation for having comprehensive reforms and incorporate aspects of high quality care along with expanded coverage. it is a simple reality that when americans are healthier, they spend fewer dollars on health-care services. by combining health care and information technology and how we pay for its, we can eliminate duplicative services. the blueprint in vermont and what we have in place six years ago, we utilize that helps teams to provide coordinated services for primary care practices.
medicaid and private insurance companies along with employers are participating in this effort. >> yesterday's announcement will now be able to participate in this kind of exciting and state led reform. these are not just theories about what will happen sometime in the far future. these reforms are having a real impact on the lives of people today. vermont is not the only place where reforms have been undertaken. there are programs in minnesota and washington and in other states that are removing care and removing excess spending in the system. they can all serve as models for the state government and other states. coverage efforts really need to go hand in hand. many governors have expanded coverage through private and public programs to make sure that folks have access to
republic insurance. and needs to be more than insurance in name only. they need coverage that helps them stay healthy and prevent disease. we focus on improving the delivery spending -- a system it will improve health outcomes. and is not just important for the health of families, it is critical for state government. that has to be done right. my colleagues are watching the debate in washington closely. the impact on their state budgets could be enormous. health care reform that doesn't respect the fiscal realities of state for government will not only failed to improve the system, it will sap resources from other efforts such as improving education, protecting the apartment, and helping our economies. states cannot print money. we have to balance our books at the end of every fiscal year. doing so is not getting easier. states are facing a projected budget shortfalls of over $200
billion in the coming years. democratic and republican governors are forced to make painful decisions. 28 governors proposed spending cuts to higher education. 20% recommended cuts in k-12 education. some governors recommended tax and fee increases, totaling nearly $24 billion. vermont is no different. we learned last month that our state revenue projections are down 2.5% right after our budget was passed last year over my objections. to give you a sense of the gravity of the situation, even under its most optimistic projections, state revenues will not have recovered to pre- recession even by 2014. states are going to have to make even more tough decisions to balance our budgets and
avoid increasing taxes to a level that will stifle growth and innovation. federal mandates that are not fully funded, at health reforms will bust budgets and ultimately failed to achieve their objectives. health care reform of the federal loveland its respect the fact that implication the state level is not the up-one-size- fits-all. governors have it critical role. it will take a lot of potential restructuring of state governments to move this forward. states will be where the rubber meets the road. leadership and experience will be crucial to succeed with transitioning to a reform system. they will insure that they have the flexibility to implement those reforms. my colleagues are working hard to ensure that policymakers in washington hear that message. flexibility is the key to the innovation critical to the success of their reforms.
we realize that there will be adapting in the state capitals to whatever passes here. a key component is to help governors understand what national reform means for them and their programs. we will need to get up to speed so governors can make decisions on the timing and process of implementation. they need to approach its strategically. if health-care reform becomes law, many will be left to federal agencies. we will need to work with the agencies to ensure the concerns are noted. i want to offer some personal views on the current congressional discussions. a lot of work has gone into developing the house reform proposals. they have been listening to state concerns and made some changes in their proposals to address them. of all governors believe that improvements are needed in the system. their initial reactions differ.
some are opposed to any unfunded mandates to states all others signaled their strong support for the proposals. all governors need more details. they are all concerned about the impacts to our states. i wanted to mention three areas very briefly. on insurance reform, the finance committee lays out new federal standards. it appears to give states flexibility to make changes and others that states believe will supermarkets. the amount of state insurance pre-emption is limited and the day-to-day insurance is deaf to the states. these are not changes we can make with the flick of a switch. that is what it does occur -- is critical to phase in any new rules. we need to make sure they about the experts in the state's to put them with existing structures and regulations that we already have. the finance committee seems to recognize the value of the help the exchange concept. a complex array of court
commission issues cannot be dictated from the federal level. but it is critical that states run the six changes brit several pioneering states have already demonstrated that they can make it successful for consumers. we know that states need to thoughtfully develop the relationship between the exchange and state medicaid programs so that low-income individuals can get the appropriate care. they also need to provide food stamps and welfare systems. finance committees, entrance reforms still need work. i think they're heading down a path that seems workable for the states. governors remain most concerned about the medicaid expansion and tremendous liability for states.
the original house committee bill are recognized our precarious fiscal condition by permanently funding in medicaid expansion. governors have discussed the expansion at great length. the chairman's proposal has moved far going from 0 to an average of almost 90% federal funding over the long term. there is still enormous risks of four states. many states are concerned that medicaid expansion will create upward pressure that is unsustainable. this is a reasonable trend to expect. it has many governors concerned about the fiscal pressure is by the millions that are currently eligible, but enroll. there could be 6 million of these individuals coming into medicaid from the woodwork effect. they should be treated as part
of the expansion population. i believe it should receive an increased federal match. as congress moves forward, we hope they work with governors to craft a successful reforms. they need to recognize that the forms cannot be built on the backs of states, but only can be done in partnership with them. governors can shake a prescription for health care reform to make sure that it is affordable and successful and accountable to our citizens and have an opportunity to fill our role as leaders and improve the quality of the system and provide more insurance coverage. it is an important issue on the minds of all of the governors of our great country. i am pleased that we have been able to work across the aisle to articulate their concerns. i hope that before all this is said and done that the folks in the congress will find a way to reach across the aisle and find some bipartisan solutions.
it will improve the health outcomes to the people and our country. thank you all very much indeed. [applause] >> we have a lot of questions here. what lesson should washington take away from your experience in passing health reform in vermont? >> the key to what we have accomplished is a comprehensive approach. it is not just adding more people to medicaid or other publicly supported programs. it is changing how we actually deliver care. let me give you a specific example. we have community health teams. we have three communities across the state that comprise 10% of our population where we have a primary care delivery model that is exciting and
successful. we have a medical home for vermonters so that their affiliated with the practice brit a dietitian, whatever is necessary to fulfil the needs of the individual patient. at the white house health form that i was privileged to host in march, a young woman from the northeastern part of our stay parked about her experience. this is a young woman that suffered from the chronic disease that was not making much progress that was out of work and expensive to our system. when she got into a practice that constitutes a medical home with her community health team, her life began to turnaround. she has a team of professionals they're really care about her and provide the ongoing care
that is necessary to get her on the road to recovery. she is managing her illness. it really can make a difference. the message is that there needs to be a comprehensive approach. it is well thus, prevention, management of chronic illness, providing an incentive to providers to provide a good quality of care. we pay an incremental bonus to our primary care providers in this program based on their adherence to standards of the national council on quality insurance. they get paid more for delivering better care. in medicaid alone we have seen an 11% decline in the number of admissions to our hospitals and a 6% decline in the emergency room usage.
i think that we have a model that works. we have saved nearly a quarter billion dollars in medicaid over the last few years. for vermont, that is a lot of money. >> what is the one aspect of vermont reform that you have not seen represented in the national health care bills? >> to be honest, we have not seen the bill from the senate finance committee. i am not sure i could answer that specifically. i do appreciate the chairman of reaching out to governors. we have had a number of meetings and teleconferences. he has reflected some of the concerns we have raised. he has moved in the right direction. most governors want to see what it means to their individual states. until we have the language of
the legislation, i am not sure i know what the impact is in vermont. there were some numbers floating around. i want my medicaid director to a put in the number from my state. we have been so focused on medicaid expansion that we have not had detailed conversations about reform. to the extent that it does not incorporate what i described to you as a model for a delivery system reform, that needs to be added. >> is there a health care reform that vermont tried it that was a mistake and that you think that federal lawmakers should avoid? >> probably the ones that the legislature passed that i vetoed a few years ago. namely tax increases. the reason i say that is that you have to get costs under control.
i have often said to the people of vermont that whether you are for publicly funded health care options or private options, it does not matter what pocket we pay for it out of, all of their pockets are going to be empty unless we get the cost of health care under control. unsr no carrierringconnect 1200 for health in 2003. after six years, we have been able to achieve some of the results i have described. it takes time and dedication and commitment on the part of insurers and providers and everybody in vermont to turn the proverbial battleship and put things in a different direction.
we have demonstrated that it can work. adding more money to the system i do not believe economically or fiscally is the way to go. >> what was your political strategy in vermont that help you avoid some of the political pain that is going on now like the tea party movements? >> there was a little pain. after we passed a bill and they passed a bill in 2005 that i reject it, we came back in next year and work together and accommodate the different points of view and got a bill passed that was not everything i wanted, it was not everything the legislature wanted, but it was something we could agree to. i was pleased when a senator from the other party said,
echoing through the first round with the veto really resulted in a better bill. it was not a better bill entirely, but there is a level of mutual respect. vermonters are ruggedly independent. we care about the people we represent. despite our differences, we are able to come together. >> what is the status of the health and information exchange in vermont? >> we began a program a few years ago, the vermont information technology leader said that has public and private participation in establishing an exchange for our state. i believe strongly that the information technology is one key to cost containment and improvement of care. we are seeing real evidence of
that as well. there was a recent report in a publication. did you write that question? this highlighted this in a couple of places, notably in the city where we have the regional medical center. there was a medication history pilot project. if we go into the emergency room and you are part of that community of care, your history is on mine for the emergency room doctors to see the soon as you come in the door. there was a case reported where a woman came in and had stomach pains of some kind. without this capacity to get the information immediately online, who knows what would have happened?
in fact, the doctor pulled the history up on the screen, talked to the patient, found that she had not taken her medication for for a problem. the care was delivered quickly, expansively, and correctly. i believe that technology is key to get providers the information that they need to make real time decisions. it is vital to this program we have launched with our providers. we have a program where we are getting laptops to providers. we have a website that we have been working with to facilitate this. we are going to make sure that the entire state has the capacity. >> speaking of the emergency rooms, this question asks, a physician just call me that the
emergency rooms are becoming dumping grounds of the nation's health-care system. how do you fix that in any health care reform? >> we are making progress on that front. we have seen a 6% decline in the emergency room usage by our medicare population because of our blueprint strategy of focusing on preventive care and early care and screening and making sure the people get their russet-regular physical exams and putting community health-care teams in place. it really does work. i think most americans would rather spend their time somewhere other than the emergency room. if we could give them the tools, the care team, the self- confidence to do what is necessary to take better care of themselves, then we can achieve those results. we have seen some progress in vermont. it is a model that can work elsewhere.
>> how does your program to increase access for uninsured or underinsured people? what evidence do you have that they are getting access? >> as you noted in your introduction, we have reduced the uninsured rate from 9.8% to 7.6% in the couple of years since we launched our efforts. the majority of those uninsured are eligible for medicaid, they just do not sign up for it. we have extensive average programs. i guess we will have to make them better. we have provided affordable coverage as a result of our reforms. what i have done i think is a good model. it is a seamless system of access based on family affordability. we have the basic medicaid program that requires no outlay on the part of the participants.
the vermont access program is a program that requires a premium based on income to participate. we have a partnership with some private providers where participants pay a premium based on their ability to pay. eventually, people are able to afford insurance on their own. that is what we need to do. the problem we have in america is the benefit cliff where you are either on a public program for you are not. there is no incentive to better the yourself or improve the economic condition of your family. that is not right. we have to find a way to make a grudge with its system of access. that has been the philosophy we have used in their state. we have thousands of people
covered. we will keep at it. >> i want to know who the person is with bad handwriting and good questions. given the costs in vermont have gone up more than the national average according to the health care administration, what evidence do you have that the medical home pilots will save money overall? >> in medicaid, we are saving money. according to our medicaid office, in the four chairs of the global commitment waiver we have in place since 2005, our expenditures are $245 million less than they would have been under the traditional program. i mentioned the drop in utilization in hospitals. i am very proud of that. we have work to do. we have an infrastructure in vermont that is probably not as efficient as it might be in some other places because of
our small population. the rural nature of vermont, the small population makes it difficult in many fields to achieve the economies of scale the other places do. it is true in public education where our expenditures per capita are the highest in the nation. it is true in corrections where our cost per inmate is quite high because we have smaller facilities spread around the state. it is true in health care where we have relatively small hospitals. i am not sure that the economy of scale is something you can never completely overcome. we have seen some real progress in our medicaid costs. i am confident that our strategy will be successful for the entire population. >> i kept two questions about canadian commuting habits. they are asked in opposite ways. in vermont, and do you see many canadians coming to your state
for procedures that are superior in the vermont health care system or care that they would have had to wait for in canada? >> we see canadians coming to vermont for a variety of reasons. to ski, to shop. i think nearly 40% of the passenger traffic is from north of the border. it is a lot smaller and more convenient than the bigger airports in montreal. a lot of folks come self for that purpose. . come south for that purpose. we regard our quebec neighbors as not foreigners, but friends prayed that this has gotten us off topic. we have villages by the international border. we have a manufacturing plant that the split. we have an opera house and a library that is split by the
border. these are our friends and neighbors. there is a lot of interaction. there is commuting for work across the border. i can tell you about one conversation i have had with the canadian woman in the not too distant past. despite the challenges,÷v most care)9 system and want to presee it. pñioif the supreme court ofmú cv earlier in this decade said in0÷ waiuog list is not access to there is some movement to a public, private blend in canada. this woman told me about her son who was almost at the two- year anniversary when i asked for an appointment for somebody to see him.
the lesson i take from general conversations with canadians is that their quality of care is good. their emergency care is good. if it is not an emergency, they are made to wait. i do not want a mother to know the two-year anniversary of a request for an appointment to see a practitioner. >> this is the converse. don't lots of vermonters go to canada for care? does this not mean that we could learn something from their insurance company-free system? >> i anecdotally do not know of vermonters to do. we have seen some access to prescription drugs from north of the border. they are often less expensive.
in terms of actual care and the convenience of somebody that is closer to a community on the border, i have not seen that. >> moving on to the federal situation, how much consultation is going on between congress and the governors? do you feel like the governors have been a part of the process? >> i discussed that in my remarks. i do appreciate that, especially the reaching out we have seen from the gang of six. even beyond that, i have met with and talk on the phone with speaker pelosi a number of times. we talked about this and other topics. there has been some interaction. the bulk of it has been very recently when the chairman and his colleagues spent a lot of time with the governors. we have a variety of different formats and which we do that. we have a health care reform task force that i appointed
that has 14 governors, seven in each party. it is tough on short notice to get everybody on the phone. we get the vast majority of them when there is an opportunity to talk with the senators present there are four leaders of the association that will be available to meet with them. we do it almost always on a bipartisan basis as i suggested earlier, that is the way we are going to succeed in these health care reform efforts. i thought the senator made a good point in the comment that heights are reported a couple of weeks ago. he said that the senate could pass a bill that is not a bipartisan. they marshalled and the necessary votes to push them through. in the long run, i hope congress will want the reform effort that the american people can feel good about, that the american people will buy into.
if that is something that the force of the people and our country or force on the states and it is unworkable or unsustainable, then it is not sustainable. >> how important do you think the recent discussion on medical malpractice reform is to the health care reform debate? >> it is an element that is worth pursuing. the president mentioned it in his speech. the chairman has included it in the bill he is presenting this week. some states have made some real progress on medical malpractice reform. california has some innovations that are often cited as quite strong. mississippi has put in place some reforms as well. we have tried in vermont with
less than complete success. i think it makes sense the way the senate finance committee is approaching it. there would be grants for states to put in place some kind of reform efforts. whether it be some kind of mediation process as or malpractice courts. whenever states would like to do with a little bit of federal support to facilitate that, i think it is a good idea. i know there is a lot of debate about the significant cost of care. some judgments and settlements are no more than 1% of the total cost. there is a defense of medicine. you will hear that from physicians and hospital ceos. i had a chat with one ceo that is no wonder in his position. we were chatting about this a few years back. he said that i will be honest with you. if you, jim douglas, come off
the ski slope with a fracture and come into this hospital, we will give you the best care that we can and you will be just fine and you will be good to go as soon as possible, but if it is somebody from washington that is not in the local area but has a license plate from far away, we are probably going to run some more tests. that is the way we do business. it is a factor that we need to consider. i was pleased that the chairman was included in this. >> do you see any alternative to expanding medicaid or is the answer to have full funding of any expansion? >> frankly, there should be full federal funding if there is an expansion. mandates are not acceptable.
i suggested a few weeks ago that the new committee draft has moved in the direction of more federal support and we are grateful for that. some of my colleagues pointed out that even at 5% of state funding, 5% is still a lot of money. to put this in context, i mentioned the fact that we're now going to be to our pre recession revenues of 47 or eight years. look at what states have done during that time. we have cut education, which is the big public expenditure that most states have. states have underfunded pension systems that have borrowed more in some cases. they have laid off more workers. we can expect states, just one the revenue recovers, to put
every incremental dollar into an expanded health care system. there are other competing demands. the feds have to own up to whenever they require the states to do. some say the medicaid expansion is not the way to go. it is a program that is big, unsustainable, inflexible, and we ought to think of something new and different and a more creative way to expand coverage. our approach in vermont has been a public, private partnership. i think it has been pretty successful. i am sorry that we have to beg the federal government for permission for the waiver process to implement some of the reforms that we have. i have to tell you a little story about that. when i came down here several times to request the waiver to put in place the reforms that i
described. i came in with the secretary in number of times. somebody said, now you have to go over to omv. i did not know that. they sign off on all of these financial own arrangements. i made an appointment to go meet with the folks over there. i went into the old executive office building. the then governor of texas was coming out of a similar meeting asking for a medicaid waiver from the folks there. i said, jeb, how did it go? he said that i do not think it got too well. he said that if you cannot get a waiver from this administration, i do not know about me. >> do you think the reform proposals do enough to address long-term care and the strains on medicaid?
>> i am glad that you brought that up. here is another area where vermont has innovated. i really feel good about the progress we have made. we have something called choices for care. medicaid participants, that makes old or disabled vermonters' or americans. there is a bias towards nursing-home sprint what we have done is get equal access to care at home and institutional settings. we are the second oldest state. despite that, we have delicensed several nursing home beds over the last few years. we are caring for people at home. my in-laws are in their middle nineties. they are not well. they are still at home with a
lot of care. they are not on medicaid. i cannot imagine if we have a choice, not keeping them there in the home where they have lived for 65 years. i think most americans feel that way. we got a waiver to use our medicaid dollars to keep more people at home. we have saved millions of dollars over the last couple of years through that effort. i think that long-term care has to be a part of it. it is not the biggest piece of the program, especially as the population ages. >> considering that vermont is the second coldest day, what was the public response to the so-called death panels. >> i mentioned earlier that vermonters are independent. it is fair to say that we are quite simple in our public
discourse. one of our senators it serves on the health committee. he had several well attended forums as other members of congress did around the country during the august recess. there were no disruptions similar to what we saw in other places. people had opinions. and they express them. sometimes strongly, but in a very respectful and civilized way. the range of public opinion in vermont is across the spectrum in terms of their views of these reform efforts. the level of debate i think has been a higher level than we have seen in some other places. >> what do you make of the tea party movement and what it says about sentiments about obama's plan for health care nationwide? >> as i suggested early in my
remarks, it is perfectly appropriate for people to have strong views, to ask some serious questions to try to understand what it means when proposals seek to reduce medicare expenditures. does that mean a cut in benefits? does that mean reimbursement to providers is going to be reduced. a less access to the care that people need. i think that these are fair questions. they need to be debated on their merits and not with the kind of inflammatory performance as we have seen in some areas. for anyone who believes that these were organized by the republican party, i do not think we are the organized. i think americans are concerned
about this and showed up at these events to express the concern. i hope if we can refocus the debates on the real merits of the issues that need to be discussed, we can do something positive. >> you have been asked to solve a mystery. it looks like the public auction is dead. who or what killed it? >> i think it was the professor in the library. with the candlestick. [laughter] i am not a fan of the public option to be honest. let me give you a reason from our own experience. about 20 years ago, vt. started a program called doctor dinosaur. that is a medicaid-supported program for children. we have virtually full
universal coverage for our kids. the percentages are quite low. it is the transition to the population. it is virtually universal. it has been affordable because insuring children is a lot less expensive than it is for people in their older years. here is what happened. the program went into effect and a lot of employers said to their employees, take your kids off of the company planned and put them on that new state program. that has happened to a lot of folks. what we're trying to do in our reform effort is to provide subsidies to people to get coverage through their employers as well as the catamounts plans. that is a mascot for a
university. it is a panther that is now extinct. the last one was shot in 1836. through their employer, if it is at least as comprehensive of a plan as we have offered, since we saw this migration away from plans to employers, my fear is that the public auction will see the same kind of migration and not provide the robustness of the market that we need. >> we arguably have the best health care technology in the world. new technologies are always expensive. how can we ration the use of these technologies across the population. >> that is a good question. i am not sure if we can figure
that out in vermont. we have a certificate process. we can determine when a capital expenditure is necessary for a health-care institution. it is difficult to say no when a community comes to a state regulator and says that we have got to have that dialysis program and our community. with gas prices as high as they are and no public transportation, you cannot expect us to drive 25 miles to some other community to get dialysis, and do you? that replicates itself throughout our state many times. i'm sure it is true in other places as well. we are seeing a significant expense for an infrastructure. that relates to a question that
she asked earlier about the relatively high costs in vermont. we do not have the economy of scale that other places do. that is an area that continues to challenge us. i am sure that is true in other parts of the country as well. >> we have a wild card question for you. how do you feel about your video of the same-sex marriage built? what impact do you think same- sex marriage will have in vermont? >> that is a matter of great debate. earlier this year, it is a matter of intense personal opinion. i see it quite differently from other issues that we confront. it is not something that deals with the economic well-being of our state, the fiscal integrity of vermont, job creation, or affordability. it is a personal opinion that people have. everybody will cast his or her
vote as he or she deems appropriate. i cast my vote in the legislature decided to go another way. i certainly accept that. >> we are just about out of time. before i ask the last question, i have a couple of important matters to take care of. let me remind our members of the future speakers we have the president and ceo of the mayo clinic. we will have another health-care chat tomorrow. on september 28, ken burns, the documentary filmmaker will be joining us to discuss his new program on national park sprint on october 8, the postmaster general of the united states postal service will give us the state of the postal service. i would like to present our guest with the traditional and much coveted national press club mug. >> thank you.
>> i feel good about it. i have more time to focus on my position as chairman to help improve the outcomes for american people to improve our delivery system and control the costs. another answer to your question is i have to remember how to drive a car. [laughter] thank you all very much. [applause] >> other like to thank you all for coming today. i also want to thank the national press club staff members. thank you for organizing today's lunch. i would like to thank the npc library for its research. the video archive of today's luncheon is provided by one
center. our information is available for free on itunes. you can purchase transcribes and audiotapes by calling 1 #. [unintelligible] please go to our web site for more information. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]
>> up next on c-span, health insurance executives talk on capitol hill. the republican health care proposals are discussed next. and there will be more discussion from gov. jim douglas. >> on "washington journal" tomorrow morning, they will talk about a missile defense in one area. president of the mayo clinic will take questions about the health care debate. we will be joined by bertha lewis who works with the group acorn. and michael stern of discusses his new book about homeland security. this show is live on c-span every day at 7:00 a.m. eastern. >> in 1971, as a new york times reporter, this person saw some
top secret pentagon papers. he's won the pulitzer prize and will discuss his latest peace this weekend on q&a sunday night at c-span. >> a group of health insurance executives testified today at the capitol hill hearing. they talk about their process, administrative costs, and other issues. this hearing is before the house oversight subcommittee on domestic policy. this is three hours. >> the committee will now come
to order. today is the second of the two- day hearing. we are looking at the bureaucracy of the private health insurance industry and seen how it influences the relationship between physicians and their patients. yesterday, the subcommittee heard the testimony of individuals, doctors, whistleblowers, and policy analysts, all of whom related their experiences with and opinions about the private health insurance bureaucracy and its impact on health care in america. today, the subcommittee will hear testimony from top executives, from the six largest health insurance company in the united states. among to welcome the witnesses for thand thank them for their appearance.
-- i want to welcome the witnesses and thank them for their appearance. the house has adjourned for the weekend. that generally means there will be very few members here. good afternoon and thank you very much for your presence before this subcommittee. yesterday in we received testimony from the daughter of a
man whose bone marrow transplant was delayed 126 days. well authorization from his insurer was denied. there was an appeal. she asks, would there have been a different end to my debts story if he had been given approval to his first transplant request? would he have been alive today? we do not know. his chance for survival did not increase because of the bureaucratic roadblocks of the insurer to change the course of my father's treatment and made him wait for his potentially life-saving bone marrow transplant. we have heard from the father of a two year-old who was born with a severe cognitive disorders. he has had to struggle to get the coverage to pay -- the
coverages premiums paid for. recounting the toll on his family that the repeated delays of denials cause -- here is what he told us. he said the stress of having to hold the hmo to their agreed upon obligations as well as me being the care manager of my daughter has robbed me of my role as -- as her loving daddy. the experiences of these individuals are the tip of an iceberg. regulatory records are replete with recent findings of ronald lyle and delay of health care a private house -- wrongful denial and delay of health care by private insurers. there has been underpaid claims
, and hassling paper work. needless delays and denies for coverage for prescribe treatment has occurred. it can be as detrimental as the disease itself. this was the conclusion of the ohio supreme court when it upheld the largest jury awards and ohio's history against anthem for denying lifesaving treatment to one patient. here is what it said. then came the bureaucracy. and them -- anthem had worn them down like a cancer. they follow their own course, and caring, oblivious to what it destroyed. seeking only to have its own way.
regulatory actions and jury awards to not tell the whole story. these measures consist only of instances in which insurers were caught and punished for violations. there is no record of the suffering that our constituents endure without filing a lawsuit or complaint. the research of a california nurses association publishes the data of some claims. they found a claim denial by health insurers operating in california averaged 21% in 2002- 2009. we learned yesterday that there is no comprehensive national data source on all health care coverage that has been denied, substituted, or delayed. health insurance companies promote the public image that
they encourage healthy living. all of the insurance companies here today want to be represented by the top doctors known as chief medical officers. had we allowed that, their public image would of been consistent but it would have denied our ability to probe how health insurers really work, what is their business model? whether they follow the doctor's order or interferes by denying a pre of crustacean. they are making business decisions not medical ones. the amount of each dollar receive in premiums that health insurers spent on monthly expenses. that is a key indicator of the insurance ability to control spending in health care and predict profitability. insurance company executives focus on the concerns of wall street. we understand that.
one of the nation's largest private insurers say investors what the mlr to keep shrinking. investors want that mlr to keep shrinking. if they see an insurance company has not done what meets their expectations with the medical loss ratio, they will punish them. i've seen a company's stock price fall 20% in a single day when it did not meet wall street's expectation with the medical ratio. they have developed a sophisticated bureaucracy to avoid paying for expensive treatment. they're developing products with high co-payments so they don't have to pay health bills. there are rescisions in which they revoke a policy after receiving premiums in which it was filed. they cause them to become insolvent at the start of the
illness. finally, private health insurance companies are charging higher rates and earning huge profits by not covering people who are very sick. that's what wall street wants to see. we have testimony from the six largest private insurers in the nation who are here to explain to this committee and congress how you can reconcile the demands of wall street which are quite significant and i am going to recognize the distinguished ranking member of this subcommittee. >> thank you, mr. chairman. i want to thank our witnesses for being here today. we heard some heartbreaking stories yesterday of families dealing with severe illnesses and all of the paperwork ever forced to wait through when trying to get treatment. the government should not be the final arbiter of these health
care decisions. it should be between doctors, patients, and their families. when people get sick and their insurance against canceled, that is unacceptable. it is these instances when people most need coverage. they pay their premiums, insurers should uphold their contractual responsibility. we have had a hearing on improper health decisions. the assistance should only occur when there is a material misrepresentation of the facts. all stakeholders, regulators, and consumers should try to prevent some of these occurrences. we want to make sure that all americans have access to coverage. what can we do to make sure all americans have access to coverage? my friends on the other side believe more and bigger
government is the answer. i think americans instinct actively realize that trading some challenges with the bureaucracy of the federal government is not the solution. instead we should keep currently what's in the system and try to insure what's not working. first, all americans must have access. second, that coverage should be truly owned by the patient. third, we must improve the health care delivery structure, a and finally, they must try to rein in the cost. i'm glad our witnesses can be here today. i look forward to hearing their testimony. thank you, mr. chairman. >> i want to thank my colleague from ohio we have a bipartisan effort here on these hearings, and i always appreciated the perspective. and also the fact that you sometimes offer a contrary point of view which is needed to get to the truth, so thank you. we have the privilege of having
the chairman of the full committee here. and i'm sure all members would agree that it is our responsibility when the chairman of the full committee shows up to provide the chairman of the full committee with an opportunity to be recognized. and so at this time, i want to thank mr. towns for the support he has given this subcommittee in our effort to get to the bottom of some of these serious health care issues, and thank you for your support in the whole range of concerns the american people have. the chair recognizes the chairman of full committee, mr. towns, of new york. >> thank you very much. i would like to thank you, chairman and ranking member jordan for holding this important hearing on unfair practices engaged in by private health insurance carriers. let me begin by saying i agree with president obama's statement
last week to the joint session that private for-profit health insurance companies perform valuable services to their subscribers and our nation. i hope president obama rightfully calls for health care recognition, that he limits discrimination because of age and gender so that seniors and women will pay the same coverage as others, prevents insurance companies from dropping coverage when people are sick and need it most. caps out on pocket expenses so people do not become broke when they become sick. and eliminates additional charges for preventative care such as mammograms.
in many states, insurance companies can simply cancel person's insurance if any existing medical condition is not listed on the application. and this can happen whether the person is even aware of the condition or not. we hear repeated reports that insurance companies limit benefits simply drop or deny coverage for high-risk patients who whose claims eat into the carriers' pockets and produce high claims. the carriers are doing this at the same time their executives are receiving millions and millions of dollars compensation packages. businesses cannot provide the employees with coverage due to their own eagerness to make a profit. on the other hand, patients are afraid to disclose health conditions and might even be
forced to lie in order to receive medical treatment. some patients suffer greatly as their health declines without necessary medical treatment. these insurance carriers' practices are unacceptable and must be reformed. i believe insurance carriers must be held accountable. if a company sells insurance, it must provide insurance coverage. when claims are made in that regard, it is essential that congress enact health care legislation that includes provisions designed to ensure accountability and strong enforcement. mr. chairman, i applaud you and mr. jordan for the work you're doing, and members of this committee, but i want you to know that we have a lot of work to do. because as we look and see in
terms of what people are going through, we must reform it and we must reform it in a positive way. on that note, i yield back on the balance of my time. >> the chair recognizes mr. foster who was here even before everybody else. we'll go to mr. cummings, then. >> thank you very much, mr. chairman. mr. chairman, thank you, again, for holding this hearing. and i want to thank our panelists for being here this afternoon. yesterday we heard chilling testimony socked into the conscience. after hearing that testimony, it was very difficult for me to sleep, about what insurance companies do to regular, everyday people like the people that i represent. we heard from a mr. potter, wendell potter, and let me just
give you some of the words he said. he said for weeks now, and i quote, we've been hearing industry executives say the same things and making the same assurances. i'm sure you will hear the same refrain tomorrow. this time, though, the industry is bigger, richer and stronger. and it has a much tighter grip on our health care system than ever before. in the 15 years since the insurance companies killed the clinton plan, the industry has consolidated to the point that it is now dominated by cartel, for-profit, large insurers. the average family doesn't even understand how wall street dictates, determine whether they will be offered coverage and whether they can keep it and how much they'll be charged for it. but, in fact, wall street plays, and i continue to quote, a powerful role. the top party of for-profit
companies is to drive up the value of their stock. stocks fluctuate based on company's quarterly reports which are discussed every three months in conference calls with invest orz and analysts. continuing the quote, on wall street, investors and analysts look for two key figures: earnings per share and the medical loss ratio or medical dental ratio as some people call it. that is the number between what people pay out for claims and the difference between costs of providing coverage. what they're saying is too many people are paying loyally year after year after year, but when they want the insurance company to pay, the insurance companies quite often slap nthem in the face. they say, no, we're going to
give you a rescision. we are going to fine the preexisting condition so we can save money. but one of the things that was most chilling was the testimony that came when they told us that quite on these panels and these insurance companies get together and they wait out while they're trying to get a decision and quite often they wait so they can die. that's what we heard in here yesterday. and i said to them at that time that if that is the case, then that is fraud and it is criminal. and we, as a country, can do better than that. i look forward to the testimony, mr. chairman, and with that i yield back. >> thank you, gentlemen. the chair recognizes mr. tierney of massachusetts. >> thank you, mr. chairman, i don't intend to take my full five minutes except to note you've all heard a little about the testimony we've been hearing from individuals, and i hope you take a moment rather than
reading any pro forma statements you may have heard to explain that how insurance rates have risen, insurance companies are putting less money into actual medical care and more profits into the executives and underwriting. when it gets to underwriting, i think we'd like to hear why it is that other executives came to congress and said they would not do away with such practice like rescision where somebody is ill and getting treatment only to find that the company reaches back and tells them to disqualify for some reason. or why it is you won't stop the practice of pre-conditions or why you put the caps on coverage. this leads congress to assume that the only thing we have for consumers is to put a cap on for
wall street's self interest. there are new plans coming out, voluntary benefits, limited medical benefits. voluntary usually means employees will pay 100% of the preem jumiums and the employers nothing. maybe some lab work or x-rays, maybe a few doctor visits, but the premiums are paid entirely by the employees. those premiums are usually 50% less than major medical plans and the employees get left holding the bag because they're not really covered in the end. i know some of you companies are sponsoring a medical conference next month proposing those types of plans. i want you to address how it is that helps small businesses. you say you're doing it because you can't afford it, but you're the ones that set the rates, driving them into poverty, these small business employees. my small business isn't
impressed with it, and they don't want to go that direction. they want their employees to have good, solid coverage. i look forward to the testimony and maybe a discussion afterwards that maybe the direction we're going into in private health care industry, and maybe you can convince us that it's not essential we do something in terms of regulation and competition to put a stop to those practices that really haven't shown or reflected well on your industry. i yield back. thank you, mr. chairman. >> if there are no further opening statements, we will proceed to receive testimony from the witnesses before us today. i want to start by introducing our first panel. mr. richard collins, welcome, mr. collins. mr. collins is the senior vice president of underwriting, pricing and health care
economics at united health care group. he also serves as ceo of golden rule insurance company and president of united health one. united health care's individual line of business, he served in his capacity since july 2005. mr. collins also manages the individual business of security company, and pacificcare. next, mr. brian sassy. welcome, thank you for being here. mr. sassy is president and ceo of the consumer business unit for well point, inc. responsible for the company senior, state-sponsored and individual under 65 businesses. previously, mr. sassy was president of blue cross of california. and chief executive officer of its life and health affiliate. he also served as vice president of operations, and strategic initiatives for blue cross of
california. and general manager of small group accounts for the west region for wellpoint, incorporated, the parent company of blue cross of california. thank you. miss patricia a. farrell. welcome, miss farrell. miss farrell is senior vice president of national international business solutions for aetna, incorporated. leading divisions which provide health insurance for the federal government, tricare and state medicaid programs, and other businesses in the u.s. and abroad. previously, she was the senior vice president of aetna specialt this person has served as senior vice president for strategic planning. is that correct? mr. george -- mr. james blume.
his primary responsibility is to supervise all accounting, analytical, financial, risk- management, treasury, and investor relations activities for the company. thank you for being here. mr. thomas richards. we appreciate your attendance. he is senior vice president for product management and new product development for cigna healthcare which provides customer benefits and online enrollment. previously, he ran their stock- lost business which provides insurance to middle-market and national segment customers. he has held a variety of product management positions including in their marketing department.
and finally, our next witness. colleen lettinmeletti lettinment . executive vice president and chief operating officer of health care service corporations. where she is responsible for its internal operations. as well as numerous divisions of the company, including subscriber services, government services, enterprise information strategy and management and financial services, among others. previously, miss retin was president and chief operating officer of blue cross and blue shield of minnesota. 20 years of experience in the health insurance field. she was also the co creator of the minnesota health information exchange, the national motto for sharing electronic health information. i want to thank you, miss retin,
for appearing. and i want to thank all of the witnesses for appearing before our subcommittee today. i have to say, in just these first few minutes, in this looking out at you and in looking at your accomplishments, and in the insurance industry, this hearing is not in any -- and any of the questions that are asked, this isn't about anything personal. we respect who you are. but the institutions that you represent are here to be questioned today and challenged today. and we're going to need your cooperation and understanding your business model. now, with that, i will proceed to the swearing in. it's the the policy of the committee on oversight and government reform to swear in all witnesses before they testify. i would ask that you please rise, each of the witnesses, and raise your right hand. do you solemnly swear to tell the truth, the whole truth, and nothing but the truth?
let the record reflect that each of the witnesses stood and raised their right hand and answered in the affirmative. you may be seated. >> mr. chairman? >> yes, mr. cummings. >> mr. chairman, just point of information. mr. chairman, you just swore in the witnesses. should a witness fail to be truthful with this committee, is there a penalty connected with that? >> >> staff attorneys have just handed this to me. this is pretty pro forma for any congressional hearing. where witnesses testify and
swear under oath. there's two sections covered. one is 18 us c-section 1001, which relates to knowingly and willfully falsifying any statement. there are provisions in this for penalties that include fine and imprisonment. the -- there's another section. i was given 2 usc section 94 that relates to committee and congressional procedure if anyone fails to answer any questions pertinent. we would -- we would have to, according to this, certify through the house of representatives the facts as we see them to the united states attorneys office. so, you know, it's a standard
operating procedure in this committee, mr. cummings, that, you know, we expect witnesses to tell the truth, but if they don't, there are penalties under law. >> thank you, very much, mr. chairman. >> yeah. let's go to opening statements. mr. collins, you may begin with your opening statement. thank you. and make sure that mike is close, so we can hear what you have to sayment. >> thank you. chairman kucinich, ranking member jordan, and members of the subcommittee, my name is richard collins, underwriter of pricing and health care economics for united health care, also the ceo of golden rule insurance company, united health group company that provides individual health insurance to individuals and their families. today i'll start with some revant facts about united health group, our industry, and try to
demonstrate how we are improving the quality of health care by reducing costs and scream lining the administration. first, united health group provides high-quality health services and products for more than 7 million people, and in partnership with 5,000 doctors, 5,000 hospitals, and 600,000 doctors across all 550 states. >> second, we apply committed men and women. these people work hard to improve the health care and well-being of our health plan members. third, we have prudently managed our finances during these challenging economic times, and combat the promises that we make to our stakeholders. fourth, our industry is already one of the most highly regulated in the united states. united health group has long advocated for comprehensive, bipartisan health care reform. we have proposed constructive changes that would ensure rates do not vary because of health status and gender, and would
guarantee coverage regardless of preexisting conditions. for those that maintain continuous coverage. these reforms would also require that individuals obtain and maintain health insurance coverage so that everyone participates in both the benefits and the costs of the system. discussions of administration processes and health begin with benefits of a strong provider network. our members receive great value from our extensive network, which includes more than 85% of the physicians and hospitals in the united states. we perform periodic credential reviews to make sure that network physicians and hospitals continue to meet standards of quality. our members receive negotiated savings and discounts when they are cared for by one of our contracted providers. a key element to the success of this network is health information technology that we use to increase the speed and accuracy of claim processing. we pay more than 250 million claims annually, and more than 95 are processed on our primary
commercial platform within ten days. in fact, over 80% are processed automatically. across our entire business, we have identified 100,000 physicians through our premium designation program that consistently deliver quality in accordance with evidence-based standards. and they do so at costs 10 to 20% below their peers. these physicians use data, efficient practice management, and evidence-based medicine to guide and consistently improve patient care. this network system extends to doctors and hospitals that are best at managing complex medical conditions, such as organ transcript plants, cancer, and congenital heart disease. this helps the sickest patients receive the best possible care, often resulting in better outcomes and often at prices at savings as much as 60%. partnerships with physicians and hospitals are critical to streamlining the administrative processes and providing greater
value to our members. to that end, we have established two national and numerous local physician advisory committees. they provide us with feedback and help us ensure that we maximize the health care quality, and minimize the administrative burden. we are also introducing innovative and practical tools that allow doctors and nurses and other health care providers to spend more time with their patients and less on paperwork. for instance, our e-sink program synchronizes a person's medical history to help identify gaps in care they should be receiving. electronic medical records and e-prescribing technology help physicians practice better medicine through clinical decision support, and reduce administrative costs through automation and web-based transactions. in conclusion, united health group provides critical services and support at every point in the health care delivery system. we are privileged to serve our members and take seriously our responsibilities to serve americans in this socially
sensitive area of health care. through innovative technology and programs, as well as close collaboration with the provider community, we are successfully improving quality, reducing costs, and making the administration of health care more efficient. thank you, mr. chairman. >> thank you, mr. collins. mr. sasse, you're recognized for five minutes. you may proceed. >> thank you, chairman kucinich, ranking member jordan and members of the subcommittee for allowing me to testify today. i'm brian sassy. well point provides information benefits to 35 million people across the country, representing almost one in nine americans. we recognize we have the ability to help change health care for the better. and with this ability comes a responsibility to our members and to all americans to advance health care quality, safety and affordability. i look forward to discussing how wellpoint helps create health care value for our customers. at wellpoint, we developed evidence-based medical policy based on the latest clinical
research. our nurses and other health care professionals support our members to ensure that care is safe, necessary and timely and looking to the future, we continue to explore new ways to reward value over volume and stress safety, efficiency and patient satisfaction. one of the areas under discussion in the current health care reform debate is health plan and administrative costs. last year, pricewaterhousecoopers conducted analysis of how the typical health insurance premium dollar is spent. my written testimony includes a chart that shows that 87 cents of every premium dollar is paid out to cover the cost of health care claims. of the remaining 13 cents, 6 cents goes towards taxes, other government payments, claims processing, and other administrative costs. 4 cents go to consumer services, such as care coordination, disease prevention, chronic care management, provider support and marketing. and only 3 cents of premium
dollars remains for profit or surplus. i understand the subcommittee is interested in knowing how we determine medical policy, and how our medical policy relates to how we process our members' health care claims. our medical policies reflect input from premier academic institutions, and experts within the medical profession, as well as considering the standards of care within our local communities. these medical policies are available online to all providers, and to the public at large. last year, wellpoint received 380 million claims, and we processed 97% of those in 30 days. the subcommittee's letter asked for some information on deferral of claims. i should note that we do not defer claims. what happens sometimes is that claims are pending as we await additional information or conduct additional reviews. some common reasons for pending claims are that premiums have not been paid, that the claim is
incomplete, such as missing diagnosis codes, or when members have health coverage -- other health coverage ma may be primary. the subcommittee's letter also asked about administrative costs. our administrative costs include a variety of initiatives designed to promote the health and well-being of our members. for instance, wellpoint employees, thousands of health professionals, including nurses, dieticians, social workers and pharmacists, among others. these professionals speak with thousands of members each day, encouraging them to learn more about their conditions, and how they can better manage their care. our health professionals help members schedule necessarily follow-up care and specialist care, remind them to pick up important prescriptions, and serve as a valuable resource to our members 24 hours a day, seven days a week. another example of is our clinical research subsidiary, health corps, which has produced note worthy studies on best practices for treating low back pain, high cholesterol, asthma, to name just a few. we take these recommendations
and share them with physicians to help them improve our members' health. health care also works with the fda and cdc to improve drug safety, and helps these agencies monitor emerging drug safety issues in real-time. my written testimony includes more detail of these types of initiatives, which are typically not included in government-run programs. efforts like these funded out our administrative expenses are critical to our ability to follow through on our primary commitment, which is to improve the lives of the people we serve in the health of our changing how we finance health care without changing how we deliver health care would be incomplete reform at best. thank you for the opportunity to testify before you today. i look forward to answering your
questions. >> thank you. our next speaker will have a five minutes to speak. >> i am a senior vice president at aetna. provide medical, dental, pharmacy, disability, life insurance, and other health benefits. we provide these products and services in 50 states and to millions of americans. i am proud of the work i have done with this company for 20 years. i look forward to talking to you today about the value we bring to the health-care system and discussing our commitment to reforming the health-care system. >> we want to help americans managed a health care and get the most of their health-care dollars. we have called for major reform in two dozen five so that all
americans have guaranteed access to affordable coverage with no exclusions for pre- existing conditions. this combined a requirement that everyone have insurance coverage and financial assistance for those who cannot afford it and need it will get and keep it covered in our syst. afford it, and who need it will get and keep everyone covered in our system. i expect that many of the issues we'll discuss today will illustrate the need for reform. aetna is committed to health reform that addresses access, affordability, and quality. we operate in a dynamic and highly competitive marketplace. our business can only be successful when health care consumers are confident that we can provide the greatest value for their health care dollar, and helping them improve or maintain their health care status. our employees come to work every day, doctors, nurses, and customer service professionals,
with the same commitment to make sure our members get the best health care coverage possible. much of our focus during the health care reform debate has been on building what works well in the employer-sponsored market today, while addressing the problems in the small group market and in the individual marketplace. these solutions, which now seem to be broadly accepted, should go a long way to addressing the problem of access to health insurance. but we strongly believe that for health care reform to be enduring and affordable in a nation, we must address the underlying problem of rising health care costs. health care costs drive insurance premiums. not the other way around. over the last decade, health care costs have risen about 7.5%. and premiums have risen that very same amount. it's fundamental to our discussion today to understand the value that aetna brings to the health care system. and how our business practices are focused on empowering
consumers and health care providers, to make the best decisions possible. we process hundreds of millions of claims every year, and getting them right every single time is our goal. we recognize that even a small percentage of problems represent real issues for our customers. and for our providers. when we do get it wrong, we have processes in in place to help get it back on track, quickly. the aetna is driving innovation to improve the lives and the health of our members. in just the past four years, we have invested over $1.8 billion in health information technology. for example, some of that investment went to having personal health records that can empower consumers' decisions around their health. finally, we're also leaders in promoting wellness and prevention, and the management of chronic diseases. refocussing our system to prevent disease, and promote wellness can lead to better health for all americans, and is
positively impact costs systemwide. i believe the competitive marketplace has played and should continue to play an important role in fostering the innovation that's necessary for our country to achieve true and widespread quality and affordability in our health care system. thank you, and i look forward to continuing to work with congress to pass health care reform this year. >> thank you, miss farrell. the chair recognizes mr. bloom. >> thank you, mr. chairman. >> make sure that mic is close. we want to hear you. >> better now? >> go ahead. >> mr. chairman, ranking member jordan, members of the subcommittee, i'm james h. bloom. i'm a senior vice president, and i'm the chief financial officer and treasurer of humana inc. humana is headquartered in louisville, kentucky, offering health benefit plans for employer groups, government programs and individuals. we have 10.3 million medical members and 6.8 million
specialty members. in all 50 states in washington, d.c., and in puerto rico, humana employs 28,000, hundred employees and contracts with nearly 400,000 physicians around the country. we provided extensive or written testimony on today's subject matter, and i will briefly summarize a few key points here. every aspect of humana's operations is governed by federal and/or state laws and regulations. and humana continues to boast support and advocate for responsible health system reform. we believe that doing nothing somebody -- doing nothing is not an option. we believe that all-americans should have affordable, quality health coverage. it's essential that everyone participate in the health system with subsidies for those who can't afford coverage. and in return, coverage should be guaranteed and not based on preexisting conditions or health status. to ensure affordability, reform must focus on improving health
outcomes, reducing variations in care, and reducing costs. humana also supports america's health insurance plans comprehensive reform plan, which provides for universal coverage with insurance rating reforms. these reforms voluntarily offered will obviate the need for business practices put in place because there currently is no requirement that individuals have health insurance coverage. the subcommittee has specifically requested that we comment on our processes for both coverage determination and processing claims, as well as the physician feedback on these processes. for 2009, humana ranked number one among national payers as the easiest to do business for both doctors and hospitals. specifically, athenna health found humana to have the lowest denial rate among all major
payers. in contrast, medicare part b program ranked fifth. humana also ranked as the fastest payer to physicians. with the medicare part b program, again, ranking in fifth place. the subcommittee also asked how we address that humana makes coverage decisions. let me summarize. coverage decisions are based on evidence-based medical criteria, developed and approved by physicians. under our policy, a nurse or a nonclinician can authorize any service that's under review. however, only a licensed board certified physician medical director can issue a denial based on a medical criterion. to the extent that a practicing physician disagrees with the decision, there are timely, internal appeal processes allowing peer to peer input. these grievance and appeal processes are governed by state and federal regulations. internal appeal decisions can be
further appealed to an independent, external review entity whose decision is binding on humana. humana has worked effectively over the past few years to streamline and simplify our administrative practices. we have partnered closely with hospitals and physicians who care for our members, and our members themselves. here's one example. an industry leading multipair, multi-use electronic medical provider information exchange. humana co founded availty with the blues of florida. it fulfills the presidents and congress's call for a workable health care information technology super highway. it has standardization, speed, accuracy, transparency, and results in significant cost savings. today, across the country, 50,000 physicians, 1,000 hospitals, 100 million members, and 1,000 payers, including public payers, access or connect
with availty every year. this results in -- this will result this year in approximately 600 million transactions. availty, what it does is provide seamless provider interactions and improves patient safety, saving money. it it is digitized. most of the nonstandard administrative processes that providers have complained about for years. and for those who use e-prescribing, preventible adverse drug events have been reduced by 61%. and most importantly, there are no charges to providers for using availty. in closing, mr. chairman, let me say that humana is committed to work closely with the administration and congress to increase the likelihood that measures designed to solve the most significant problems in our health care system become the focal points of responsible and real health reform efforts. i look forward to your questions. thank you, very much. >> thank you, mr. bloem.
the chair recognizes mr. richards. you may proceed for five minutes. thank you. >> chairman kucinich, ranking member jordan, and members of the subcommittee, i appreciate the opportunity to address the subcommittee. and to discuss the issues raised in your letter to mr. hemway on august 26th. my name is tom richards, senior vice president of product for cigna corporation, based in philadelphia. at the outset, i want to emphasize, on behalf of the 26,000 cigna employees, that we support health care reform that provides security, affordability and stability for all americans. we believe such a goal is achievable by strengthening the current system to include both a personal coverage requirement and a helping hand for those who can't afford coverage. we support guaranteed coverage for everyone, and no exclusion for any preexisting condition. we support reforms in the way premiums are calculated, without taking into consideration health status or gender. we support providing subsidies to individuals who have
difficulty affording health insurance, including subsidies to small businesses. we support administrative standardization and simplification. we support a focus on health and wellness. further, we support the establishment of exchanges to provide a choice of plan options for all americans. we also support reimbursement reforms to the current fee for service delivery system. it's also important that you understand cigna's role in health care. while we have some in insurance business, nearly 80% is administrative services only. this means we administer the programs for employers in it accordance with their policies and pay claims for them. it is not risk-based, as would be traditional insurance. these employers are self-insuring and the claim payments come out of their employer funds. there is no financial incentive for our employees to accept or deny claims. at cigna, in 2008, 89 cents of each premium dollar was spent on medical care. our support for reform is aligned with what we stand for as a company.
our mission is to improve the health, well-being and sense of security of the customers we serve. our results demonstrate our focus on health improvement. competitive data from the 2008 state of health care quality report shows this difference. against a baseline of standard care provided by doctors and hospitals and a fee for service unmanaged situation, we have better results. if you turn to figure one on page 4 of my rain testimony, you'll see a chart that reflects these results. all of our coverages, be all of our coverage policies follow best practices, and are evidence-based, which means they're based on the most recently published scientific evidence. we consider safety and effectiveness. it's important to note that cost is not a factor, unless there are multiple items or services with equivalent safety and effectiveness. we are very proud to employ over 3,000 clinicians. these doctors and nurses make decisions about clinical policy, review medical necessity, and advocate for individuals.
they make the system easier to understand. they help our customers navigate the health care system when they need help. and they literally save lives. we have included the words of several of these individuals in our written testimony telling you how we have helped them. in 2008, cigna processed approximately 91 million claims for payment. more than 90 million of these claims were paid without question. i call your attention to figure 2 on page 10 of the written testimony. of the approximately 1 million claims that did require prior authorization, all but.08% were aprofd on initial review. what that means, is that cigna, more than 99.9% of the time, the person received the care that the doctor recommended, and the services were covered. at cigna, all medical coverage decisions are made by doctors and is nurses. and is ultimately, the chief medical officers are responsible for all coverage decisions. we recognize the doctor/patient relationship is critical, and do
everything we can to enhance it. let me cite just a few examples. first, cigna is simplifying and reducing administrative complexities from are payment methodologies and claim processing to problem resolution and education. second, cigna's further innovating our payment methodologies. example of this is cigna's patient-centered medical home initiative, such as the one we have with dartmouth hitchcock. we improve continuity, and coordination of care, quality of care for patients and lower medical costs for everyone. at cigna, we focus on helping people improve their health. we believe the health care is a shared responsibility of the individual, the private sector, the medical community and the government. such a shared responsibility is right for this concludes my remarks. >> thank you very much.